In the course of an audit engagement with Expo, Inc., senior auditor Miller overheard Jackson and another audit staff member discussing their personal investment portfolios. While Miller was sure that both staff auditors understood that they were prohibited from holding a direct financial interest in their client, Miller was not confident that both were clear with respect to financial interests held by relatives. In fact, Miller was convinced that Jackson told his audit team mate that he sold stock in Expo to his mother after he had performed some audit procedures. The amount was unknown to Miller.

Miller discussed this with the engagement partner who felt that this issue should be covered in a memo to the firm’s audit staff.

Required:

Prepare an interoffice memorandum to all staff auditors of Taylor and Co., CPAs.

Points to remember:

Restrict the subject matter to financial interests in clients that are held by the relatives of auditors.
Do not refer to Expo or any other client in this memo.
The memo should reflect appropriate use of a memo format, purpose-driven organization with an introduction, body and closing, professional and appropriate tone for the audience, readability including the use of clear and concise sentences and paragraphs and spelling, punctuation and grammar.

Answer rating: 100% (QA)

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